The Nasdaq 100 reached a new peak this week, but there's no reason to expect the booming tech trade to take a breath, UBS wrote this week.

As President Donald Trump announced a ceasefire agreement between Israel and Iran, the tech-heavy index coasted to a record closing high on Tuesday.

The Nasdaq's recent gains have been propelled by rallies in top chip makers like Advanced Micro Devices, Broadcom, and Nvidia, three artificial intelligence leaders that have spent the last month moving steadily higher.

These companies' ability to withstand volatile market conditions and continue making progress has caught the attention of top commentators. Investor and former Pimco exec Bill Gross recently predicted a "little bull market" for stocks, citing the dominance of the AI market.

Now, UBS says investors should stick with the tech trade, as the AI party is still just kicking off and AI adoption is accelerating.

Citing data from a recent Census Bureau survey on the use of AI in the workplace, UBS said use of the technology is rising steadily.

"AI adoption rates rose to 9.2% in the second quarter of this year, from 7.4% in the previous three-month period and 5.7% in the December 2024 quarter," states the report. "This means AI adoption is likely to soon cross the 10% threshold that took US e-commerce 24 years to reach."

UBS highlights the example of Amazon Q, a virtual assistant powered by generative AI that is reportedly "saving around USD 260mn every year through coding assistants." It also notes that 20%-30% of Microsoft's coding is completed by AI and that PayPal uses AI to handle 80% of its customer service interactions.

In addition, the report highlights the benefits of utilizing AI in healthcare. Its authors note that it has proven highly effective in areas such as detecting abnormal tissues that might have previously been overlooked.

All of this suggests that AI adoption is likely to increase in the near future, paving the way for the sector's leading stocks to continue rising.

"We believe a peak in overall AI adoption is still a long way off, and accelerating AI use is set to drive further monetization across industries," UBS states.